I have been thinking about this for some time, and I'm beginning to think the problem might be the incorrect use of Konjunktiv 1 in the source text. I had to read up again on Passiv in indirekter Rede and the only forms I found were: sie werde installiert, sie sei installiert worden, sie werde installiert werden for passive in present, past, future.
(apparently no "sie würde installiert", but I'm not a native speaker)
I see 2 possibilities now
1) If the defendant is correct and the meaning is 'was installed', an incorrect form was used and should have been 'sei installiert worden'
2)If the meaning is 'would be installed', the incorrect form was used and should be 'werde installiert'
See
http://www.mein-deutschbuch.de/lernen.php?menu_id=36